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European Markets Drop After Euro Surges

European Markets Drop After Euro Surges

The majority of the European markets ended Thursday’s session in the red. After fluctuating between small gains and losses in early trade, the markets turned definitively lower following the release of the minutes of the latest ECB meeting.
The European Central Bank could change the tone of its monetary policy communication early this year to reflect the improvement in growth prospects, minutes of the latest policy session showed on Thursday, RTTNews reported.
“Looking ahead, the view was widely shared among members that the governing council’s communication would need to evolve gradually, without a change in sequencing, if the economy continued to expand and inflation converged further towards the council’s aim,” the central bank said in the summary, which it calls “account”, of the December 13-14 policy session. The euro jumped against the dollar following the release of the ECB minutes. The rise in the currency pressured shares of European exporters.
The pan-European Stoxx Europe 600 index weakened by 0.30%. The Euro Stoxx 50 index of eurozone bluechip stocks decreased 0.40%, while the Stoxx Europe 50 index, which includes some major UK companies, lost 0.33%.
The DAX of Germany dropped 0.59% and the CAC 40 of France fell 0.29%. The FTSE 100 of the UK gained 0.19%, but the SMI of Switzerland finished lower by 0.22%. In Frankfurt, auto supplier Continental AG gained 0.17% on reports of business revamp.
In Paris, Sodexo tumbled 5.12%. The food services and facilities management group reported that its first-quarter revenues totaled €5.3 billion ($6.43 billion) down 2.6% compared to the same period in the previous fiscal year.
In London, Rio Tinto gained 1.87% after receiving a binding offer from Liberty House for its Aluminum Dunkerque smelter in northern France. Recruitment firm Hays climbed 4.25% after posting double-digit growth in Q2 net fees.
Eurozone industrial production grew the most in three months in November, Eurostat reported Thursday. Industrial output climbed 1% month-on-month, following October’s 0.4% increase. This was the fastest growth since August and also exceeded the expected increase of 0.8%.
The German economy expanded at the fastest pace in six years in 2017, driven by domestic demand, preliminary data from Destatis showed Thursday. Gross domestic product grew 2.2% in 2017 after expanding 1.9% in 2016. This was the fastest growth since 2011. The biggest eurozone economy has expanded for the eighth year in a row.